The current legal environment considers most administrative inspections as searches

Suppose that LaPearla’s revenues are expected to grow at a rate of 10% and all elements of the income statement and balance sheet are sales-driven except for the tax burden, which remains at 30%. LaPearla’s pro forma net income for 2006 is closest to:

LaPearla Company Income Statement for Year 2005 (in millions) LaPearla Company Balance Sheet, End of Year 2005 (in millions) Revenues h10,000 Current assets h2,000 Cost of goods sold 5,500 Net plant and equipment 18,000 Gross profit h4,500 Total assets h20,000 Selling, general, and administrative expenses 800 Operating income h3,700 Current liabilities h1,000 Interest expense 500 Long-term debt 5,000 Earnings before taxes h3,200 Common stock and paid-in capital 500 Taxes 960 Retained earnings 13,500 Net income h2,240 Total liabilities and equity h20,000 A. h2.2 billion. B. h2.5 billion. C. h2.8 billion.

Dollars adjusted for inflation to make them comparable over various years are known as

A) consumer dollars. B) constant dollars. C) consumer inflation. D) constant inflation. E) earning dollars.